Nikkei Average Down over 1,700 Points on Chip Sell-Off

Tokyo, July 2 (Jiji Press)–Japan’s key Nikkei 225 stock average lost more than 1,700 points Thursday, with major semiconductor-related components coming under heavy selling pressure. The index of 225 selected issues listed on the Tokyo Stock Exchange’s Prime section ended down 1,741.81 points, or 2.47 pct, from Wednesday at 68,733.15. It fell for the first time in four trading days. Meanwhile, the broader TOPIX index was up 3.48 points, or 0.09 pct, at 4,014.98, finishing higher for four sessions in a row. Chip issues heavily weighted in the Nikkei average met with intense selling following Wednesday’s drops of U.S. peers, with memory chip maker Kioxia Holdings and semiconductor-testing equipment maker Advantest ceding 13.47 pct and 9.95 pct, respectively. The Wall Street chip sell-off was spurred by concerns over excess data center capacity following media reports that U.S. technology giant Meta Platforms plans to sell access to its computing resources, according to market sources. Still, more than 70 pct of Prime issues gained ground, helping the TOPIX close higher. Economic indicators such as the Bank of Japan’s quarterly “tankan” survey for June and U.S. employment-related data have shown that both the Japanese and U.S. economies remain resilient, one market source said. The market is moving nervously but continues to be firm as a whole, an official of a midsize brokerage house said. “Funds flowed to cyclical stocks that had lagged behind the market’s recent bull run led by high tech issues,” a major brokerage house official said. END [Copyright The Jiji Press, Ltd.]